SEBI Chief Holds Meeting On Gensol Engineering Probe As Crackdown Intensifies

The chairman of the country's securities regulator (SEBI) held discussions with the top corporate affairs official regarding the ongoing investigation into Gensol Engineering, which is linked to beleaguered electric vehicles (EV) cab firm BluSmart, as authorities continue their multi-pronged examination of the renewable energy company, says a report by ET Auto.

Tuhin Kanta Pandey, who heads the Securities and Exchange Board of India (SEBI), conducted the meeting with Corporate Affairs Secretary Deepti Gaur Mukerjee in New Delhi on Friday, according to a source familiar with the matter, the report added. The discussion was centered on the Gensol investigation alongside other regulatory issues.

Regulatory Action Escalates Against Gensol Promoters

The high-level consultation happened at a time when enforcement agencies have intensified their scrutiny of Gensol and its leadership over suspected fraudulent activities and corporate governance failures.

In a significant regulatory move last month, SEBI prohibited the company's promoter brothers, Anmol and Puneet Jaggi, from participating in securities markets. The regulator simultaneously mandated a comprehensive forensic examination of the publicly-traded renewable energy firm.

These enforcement actions followed preliminary findings by SEBI investigators that identified alleged fund diversions by the Jaggi brothers and significant governance deficiencies within the organisation.

Parallel Investigation Launched By Govt.

The Corporate Affairs Ministry has initiated its own separate inquiry targeting Gensol and 18 associated entities. The investigation scope includes BluSmart Mobility, an electric vehicle cab service provider connected to the case.

Ministry officials indicated last week that their probe is expected to conclude within a three-to-five-month timeframe, according to a senior government representative.

The controversy has extended beyond capital markets, with allegations that the Jaggi brothers improperly used term loans provided to Gensol by government-backed financial institutions. The Indian Renewable Energy Development Agency (Ireda) and Power Finance Corporation (PFC), both state-owned lenders, had extended credit facilities to the company.

During Friday's meeting, Pandey and Mukerjee also addressed standard regulatory business beyond the Gensol matter. Neither the Corporate Affairs Ministry nor SEBI responded to inquiries submitted Monday regarding the discussion.

Multiple Bodies Enter Probe

The National Financial Reporting Authority (NFRA) has commenced a preliminary examination of Gensol's financial records following a referral from SEBI. Additionally, the Institute of Chartered Accountants of India (ICAI) is conducting its own review of both Gensol's and BluSmart's fiscal year 2024 financial statements and statutory audit documentation.